Abstract
BACKGROUND: Europe's demographic transition has led to an ageing population, posing challenges for healthcare and pension systems. This study aims to forecast healthcare and social security expenditure in Italy over the next four decades, starting from the different population projection scenarios, and to forecast its incidence on the Gross Domestic Product (GDP) in the context of significant demographic changes. METHODS: This study utilized annual data from 1988 to 2022. The dataset included the following key variables: GDP per capita, Healthcare Expenditures per capita, Social Security Expenses per capita, Ratio of Social Security Expenses and Healthcare Expenditures to GDP, and Italian Population Demographics. A Bayesian Vector Autoregressive model was employed to analyze the development of these variables in future years; forecasts extended to 2060 under six demographic scenarios provided by Eurostat: Baseline, Low Mortality Rate, Low Fertility Rate, High Migration, Low Migration, and No Migration. RESULTS: All scenarios showed increases in per capita healthcare and social security expenditures over time. The No Migration scenario exhibited the fastest growth in both expenditures, especially after 2050. The High Migration scenario showed the slowest growth. Other scenarios showed intermediate growth. Per capita healthcare expenditure grew by drawing a convex line, while the per capita social expenditure grew faster, following a concave trajectory. CONCLUSIONS: Due to demographic changes, social and healthcare expenditure is set to increase. Results suggest that strong and timely measures should be taken to limit the demographic imbalances affecting healthcare and social expenditures.